GBP/JPY Forecast – The British Pound Gives Up Early Gains Against the Yen

GBP/JPY Forecast Video for 25.10.23

British Pound vs Japanese Yen Technical Analysis

The British pound has initially tried to rally during the trading session on Tuesday but gave back gain rather quickly as we continue to see a lot of noisy behavior. Ultimately, this is a pair that is highly sensitive to risk appetite, and that has a huge influence on where the market goes. The 50-Day EMA is going sideways, and therefore it suggests that we are very much in the midst of a consolidation area. This makes a certain amount of sense because the market shot straight up in the air for some time, and now we are just simply digesting the gain.

You need to pay attention to the USD/JPY number, which of course is the easiest way to measure the overall strength or weakness of the Japanese yen. It is currently being held down at the ¥150 level, so if that were to break out above the ¥150 level, then it’s likely that we could see a certain amount of knockout effect over here, as it would probably send a lot of selling pressure on the Japanese currency. In other words, you need to use the USD/JPY pair as a secondary indicator.

Underneath, the ¥180 level is a major support level, as we have seen multiple times in the past. Breaking down below that would of course be very negative, but I don’t see that happening anytime soon. If we were to break down below the recent lows at the ¥178 level, then it brings the 200-Day EMA into the picture, as the absolute “bottom of the trend” according to a lot of technical traders out there. On the other hand, if we can break above the highs of the day, then it’s likely that the market will go looking to the ¥185 level as an area of potential resistance as it has shown itself to be for some time. If we were to break above there, then the market would likely go much higher, opening up the possibility of a bigger move.

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